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Down Payment

The minimum down payment for a first-time buyer, explained clearly.

In Canada the minimum down payment for a first-time buyer follows a tiered rule — 5% on the first $500,000, 10% on the portion from $500,000 up to $1.5 million, and 20% once a home hits $1.5 million. Here’s how it works, with examples.

5% to $500k10% from $500k-$1.5M20% at $1.5M+CMHC insuranceWorked examplesHigh-ratio explained
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Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #M14001433 · Updated July 2026

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“How much do I actually need to put down?” is the first question almost every first-time buyer asks — and the internet answers it three different ways. The confusion is understandable: the Canadian minimum isn’t a single flat percentage, it’s a tiered rule that changes as the price climbs, plus a separate insurance requirement below 20%. Guess wrong and you either delay your purchase saving money you didn’t need, or make an offer you can’t actually fund. This page lays out the rule plainly, works through real dollar examples at different price points, and explains the CMHC insurance piece — so you know your number before you shop.

Two people signing mortgage documents beside a set of house keys
On this page
  1. The minimum down payment for a first-time buyer, tier by tier
  2. Worked examples at different prices
  3. CMHC insurance: how a small down payment is possible at all
  4. High-ratio vs conventional, and whether to wait for 20%
  5. Getting your exact number, and the mortgage to match
  6. FAQ

The minimum down payment for a first-time buyer, tier by tier

In Canada the minimum down payment isn’t one flat percentage — it’s a tiered rule that rises with the price of the home. The rule: 5% on the first $500,000 of the purchase price, 10% on the portion between $500,000 and $1,500,000, and 20% once the price reaches $1,500,000 or more1 (the insured price cap rose from $1 million to $1.5 million on December 15, 20242). These tiers apply to one- and two-unit homes for all buyers, not only first-timers; an owner-occupied three- or four-unit property needs at least 10% down3. Thresholds are set by federal policy that can change, so confirm your exact number with us before you make an offer.

The key thing to understand is that the tiers stack — each rate applies only to the slice of the price that falls in its band. That’s why a home just over $500,000 doesn’t suddenly need 10% on the whole price, only on the part above the threshold. Your first move is to start with our first-time home buyer mortgage pathway and test prices with the down payment calculator, which applies these tiers automatically so you don’t have to do the arithmetic by hand.

Worked examples at different prices

Numbers make the rule concrete. On a $400,000 home, the whole price sits in the first tier, so the minimum is 5% — roughly $20,000. On a $500,000 home, still all first tier, the minimum is about $25,000. Cross the threshold to a $700,000 home and the tiers stack: 5% of the first $500,000 ($25,000) plus 10% of the next $200,000 ($20,000), for a minimum near $45,000. On a $900,000 home it’s $25,000 plus 10% of $400,000 ($40,000), for about $65,000. On a $1,200,000 home it’s $25,000 plus 10% of $700,000 ($70,000), for about $95,000.

Then the rule changes character entirely at the $1.5 million line. On a $1,500,000 home, insured low-down-payment financing isn’t available, so the minimum becomes a straight 20% — $300,000 — not a tiered figure. That jump surprises buyers shopping right around $1.5 million, so it’s worth knowing before you stretch for a home just over the line. These are illustrations of the general rule; your lender and property can affect the final figure, which is why we confirm it on your actual file rather than leaving you to estimate.

CMHC insurance: how a small down payment is possible at all

If you put down less than 20%, your mortgage is high-ratio, and lenders generally require mortgage default insurance to protect against the loan defaulting. In Canada that insurance most often comes through CMHC, though private insurers offer comparable coverage. The premium is calculated as a percentage of your mortgage that rises as your down payment shrinks, and it’s usually added to the loan balance rather than paid in cash at closing — so it doesn’t raise the deposit you need to bring.

This insurance is precisely what makes buying with 5% down possible; without it, every buyer would need 20%. It’s a cost, not a penalty, and for most first-time buyers the ability to buy years earlier outweighs the premium. Our CMHC mortgage insurance page breaks down how it’s priced, and the CMHC insurance calculator estimates your premium at different down payments so you can weigh the trade-off with real figures.

High-ratio vs conventional, and whether to wait for 20%

The 20% line divides two worlds. Below it you have a high-ratio, insured mortgage; at or above it you have a conventional mortgage with no default insurance. Reaching 20% removes the premium and can expand your lender choices, but it often means saving for years longer while prices and rents keep moving — and, counter-intuitively, insured high-ratio mortgages sometimes carry rates as sharp as conventional ones because the insurance lowers the lender’s risk. So “always put 20% down” is not universal advice.

The honest answer is that it depends on your numbers: how fast you can save, what you’re paying in rent, and what buying now versus later does to your total cost. We model both paths with you rather than pushing a rule of thumb. If part of your deposit is coming from family, a gifted down payment can help you clear the minimum sooner under clear documentation rules. And remember the down payment isn’t the only cash you need — land transfer tax and legal fees sit on top, which our closing costs calculator and land transfer tax calculator help you plan for.

Getting your exact number, and the mortgage to match

Everything on this page is the general rule; your real minimum depends on the specific price, the lender, and the details of your file. As an FSRA-licensed brokerage (#13737) with access to 100+ lenders, we confirm the precise figure for your situation, tell you whether your purchase is insured or conventional, and shop the mortgage that fits — because the cheapest overall option isn’t always the one with the biggest down payment.

Once your down payment is settled, the next step is a pre-approval so you can shop with a firm budget and a rate hold. Start with our pre-approval page, and if your income or credit raises questions, we’ll flag it early rather than let a lender decline you later. Want a quick answer right now? Maya, our AI assistant, can run the tiered math and explain CMHC in plain language any time, and a licensed mortgage advisor is a click away whenever you’d prefer one.

What you get

Why Canadians choose Mortgage Squad Advisors.

The tiered minimum down payment rule spelled out: 5% to $500k, 10% from $500k to $1.5M, 20% at $1.5M and over
Worked dollar examples at several purchase prices, so the math is concrete, not abstract
A clear explanation of why homes at $1.5 million or more can’t use insured high-ratio financing
How mortgage default insurance (CMHC and similar insurers) works when you put down less than 20%
The difference between a high-ratio and a conventional mortgage, and what it means for you
Where a gifted down payment from family fits, and the documentation lenders expect
Guidance on whether a larger down payment is actually worth waiting and saving for
Access to 100+ lenders to match your down payment and file to the right product
Straight answers on closing costs that sit on top of the down payment itself
FSRA-licensed advice (brokerage #13737), with every figure confirmed for your situation
How it works

Three simple steps, no pressure.

  1. 1

    Set your price range

    Tell us the price range you’re shopping in and we apply the tiered rule to it, so you see the exact minimum down payment each price implies — not a generic 5% that may understate what a higher-priced home requires.

  2. 2

    Confirm your number

    We factor in whether the home is high-ratio or conventional, whether CMHC insurance applies, and any gifted funds, then hand you a firm minimum plus the closing costs that come with it. No guessing, no surprises at the lawyer’s office.

  3. 3

    Match the mortgage

    With your down payment confirmed, we shop your file across 100+ lenders to find a competitive rate and product that fits — insured or conventional — and get you pre-approved so you can make offers with confidence.

Start your pre-approval — 5 min
FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

What is the minimum down payment for a first-time buyer in Canada?
5% of the first $500,000 of the purchase price, 10% of any portion between $500,000 and $1,500,000, and 20% once the price is $1,500,000 or more1 (the insured-mortgage price cap rose from $1 million to $1.5 million on December 15, 20242). These tiers apply to one- and two-unit homes for all buyers, not just first-timers; an owner-occupied three- or four-unit property needs at least 10% down3. Confirm your exact figure with us before you rely on it.
How much do I need down on a $500,000 home?
At exactly $500,000, the minimum works out to 5% of the whole amount — $25,000 — because the entire price sits within the first tier. Just above that, the higher tier kicks in on the excess only. This is a common threshold worth understanding, and we’ll run your specific price to be certain.
How does the down payment work on a home over $500,000?
The tiers stack. On a $700,000 home, for example, the general calculation is 5% of the first $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000), for a minimum around $45,000. It’s not a flat 5% or a flat 10% across the whole price — only the portion in each tier uses that tier’s rate.
Why do homes at $1.5 million need 20% down?
Mortgage default insurance, which enables low-down-payment lending, is generally not available on homes priced at $1,500,000 or more. Without that insurance a lender requires a conventional mortgage, which means at least 20% down. So at the $1.5 million line the minimum jumps from a tiered figure to a full 20%.
What is CMHC insurance and when do I pay it?
When you put down less than 20%, your mortgage is high-ratio and generally requires mortgage default insurance — commonly through CMHC, though other insurers exist. It protects the lender if the loan defaults, and the premium is usually added to your mortgage rather than paid in cash. It’s what lets you buy with as little as 5% down. Our CMHC insurance page explains it in detail.
Is a bigger down payment always better?
Not always. A larger down payment lowers your loan, your payments, and your insurance premium, and 20% removes default insurance entirely. But saving to 20% can mean years more of renting while prices move. For many first-time buyers, buying sooner with 5% and insurance beats waiting — the right answer depends on your numbers, which we’re glad to model with you.
Can my down payment be a gift from family?
Yes. Gifted down payments from an immediate family member are widely accepted, provided the money is a genuine gift (not a loan) and is documented with a signed gift letter and proof the funds reached your account. Rules vary slightly by lender, so we’ll tell you exactly what your lender needs. See our gifted down payment page.
Is the First-Time Home Buyer Incentive still available?
No. The federal First-Time Home Buyer Incentive, a shared-equity loan toward the down payment, closed to new applications on March 21, 20244, and nothing replaced it one-for-one. Today the main down-payment helpers are the First Home Savings Account, the RRSP Home Buyers’ Plan and gifts from family.
Do I need money on top of the down payment?
Yes — budget for closing costs in addition to the down payment. These include land transfer tax, legal fees, title insurance, and possibly an inspection or appraisal. They vary by province and property, so use our closing costs and land transfer tax calculators for an estimate rather than assuming the down payment is all you’ll need.
Does a low down payment change my mortgage rate?
Interestingly, insured high-ratio mortgages sometimes carry rates as good as or better than conventional ones, because the insurance reduces the lender’s risk. So a smaller down payment doesn’t automatically mean a worse rate. We compare insured and conventional options across 100+ lenders and show you which is cheaper overall for your situation.

Related products

First-time home buyer mortgageFirst-time buyer guideFirst-time buyer requirementsDown payment calculatorCMHC insuranceCMHC calculatorGifted down paymentHigh-ratio vs conventionalMortgage default insurance explained

Sources & references

Figures on this page are sourced below and re-checked each quarter. Rates, insurer rules and lender policies change — confirm anything you plan to act on with a licensed advisor.

  1. 1. Financial Consumer Agency of Canada, Saving for a down payment (accessed September 2026) — Minimum down payment: 5% of the first $500,000, 10% of the portion from $500,000 to $1.5M, 20% at $1.5M or more.
  2. 2. Department of Finance Canada, Government announces boldest mortgage reforms in decades (Sep 16, 2024) (accessed September 2026) — From December 15, 2024: insured-mortgage price cap raised from $1M to $1.5M; 30-year amortization for all first-time buyers and all buyers of new builds.
  3. 3. CMHC, CMHC Purchase (accessed September 2026) — Minimum equity: 1-2 units, 5% of the first $500,000 and 10% of the remainder; 3-4 units, 10%; value below $1.5 million.
  4. 4. CMHC, First-Time Home Buyer Incentive (accessed September 2026) — The First-Time Home Buyer Incentive stopped accepting applications on March 21, 2024.

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